Millions of households across England are set to see their water bills rise after the Competition and Markets Authority (CMA) approved higher charges for five major suppliers. Anglian, Northumbrian, Southern, Wessex and South East Water had appealed against Ofwat’s previous decision, arguing that its planned 36% rise over five years was insufficient to fund vital infrastructure improvements.

The CMA’s panel has now ruled that bills can rise by an average of an extra 3%, adding roughly £12 a year to household costs. The body said the adjustment reflected rising borrowing costs that make investment projects more expensive. Anglian and Northumbrian will be allowed an additional 1% increase, Southern 3%, South East 4% and Wessex 5%. Together, the five companies serve over seven million homes and businesses.

The watchdog’s provisional ruling permits around £556m in extra revenue – just 21% of the £2.7bn the firms had requested. Kirstin Baker, who chaired the CMA panel, said the authority recognised the strain on household budgets but aimed to “balance affordability with essential investment”.

Water UK’s chief executive, David Henderson, defended the rises, noting that several firms made losses in 2024. However, campaigners and ministers urged companies to support customers in difficulty, with Citizens Advice renewing calls for a national social tariff to help struggling households manage essential bills.